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1 Taxation of Corporate Finance and Financial Structures June 21-22, 2011 Steve Suarez The assistance of Marie-Eve Gosselin in the preparation of these.

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Presentation on theme: "1 Taxation of Corporate Finance and Financial Structures June 21-22, 2011 Steve Suarez The assistance of Marie-Eve Gosselin in the preparation of these."— Presentation transcript:

1 1 Taxation of Corporate Finance and Financial Structures June 21-22, 2011 Steve Suarez The assistance of Marie-Eve Gosselin in the preparation of these materials is acknowledged with appreciation

2 Overview 2

3 I. Characterization of F/X Gains and Losses 3

4 A. Assets 4

5 B. Liabilities 5

6 B. Liabilities (Cont’d) 6

7 C. Derivatives and Hedging Transactions 7

8 C. Derivatives and Hedging Transactions (Cont’d) 8

9 Saskferco Products v. The Queen 1 9 Saskferco US $ Revenue US Plant Bank US $ loan F/X Loss Hedge US $ F/X gain Canada US Capital F/X Loss on Loan F/X Income on Revenues Cdn $ depreciates; taxpayer offsets F/X loss on debt repayment vs F/S revenue gain, by translating US $ revenue at Cdn $ F/X rate at date of borrowing DTC 1183; aff'd, 2008 DTC 6698

10 C. Derivatives and Hedging Transactions (Cont’d) 10

11 Overview 11

12 II. Recognition (Timing) of F/X Gains and Losses 12

13 A. Gains and Losses on Income Account 13

14 A. Gains and Losses on Income Account (Cont’d) 14

15 A. Gains and Losses on Income Account (Cont’d) 15

16 B. Gains and Losses on Capital Account 16

17 B. Gains and Losses on Capital Account (Cont’d) 17

18 B. Gains and Losses on Capital Account (Cont’d) 18

19 B. Gains and Losses on Capital Account (Cont’d) 19

20 B. Gains and Losses on Capital Account (Cont’d) 20

21 Overview 21

22 III. Calculation of F/X Gains and Losses 22

23 III. Calculation of F/X Gains and Losses (Cont’d) 23

24 III. Calculation of F/X Gains and Losses (Cont’d) 24

25 III. Calculation of F/X Gains and Losses (Cont’d) 25

26 III. Calculation of F/X Gains and Losses (Cont’d) 26

27 III. Calculation of F/X Gains and Losses (Cont’d) 27

28 III. Calculation of F/X Gains and Losses (Cont’d) 28

29 III. Calculation of F/X Gains and Losses (Cont’d) 29

30 III. Calculation of F/X Gains and Losses (Cont’d) 30

31 III. Calculation of F/X Gains and Losses (Cont’d) 31

32 Overview 32

33 IV. Functional Currency Rules 33

34 IV. Functional Currency Rules (Cont’d) 34

35 IV. Functional Currency Rules (Cont’d) 35

36 IV. Functional Currency Rules (Cont’d) 36

37 IV. Functional Currency Rules (Cont’d) 37

38 Overview 38

39 V. Special Circumstances 39

40 V. Special Circumstances 40

41 V. Special Circumstances 41

42 VI. Special Circumstances 42

43 VI. Special Circumstances 43

44 VI. Special Circumstances 44

45 VI. Special Circumstances 45

46 Questions? 46

47 Bibliography 47

48 Bibliography (Cont’d) 48

49 Bibliography (Cont’d) 49


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